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* Strike threat comes after high profile selloff
* Shares close down
By Neil Maidment
LONDON, Oct 16 (Reuters) - Workers at Britain's newlyprivatised Royal Mail postal service voted on Wednesdayto strike for 24 hours on Nov. 4 if they cannot reach agreementwith the firm on pay and working conditions.
The management of Royal Mail, which listed on the Londonstock market in a high profile float last week, had expected avote in favour of strike action and criticised the prospect of adisruption to services in the run-up to Christmas, its busiesttime.
The Communication Workers' Union (CWU) sent ballot papers toover 115,000 Royal Mail staff and said 78 percent had voted tostrike, on a turnout of 63 percent.
The union said further action was under consideration andadded that it planned to carry out a second ballot askingworkers to support a boycott of the handling of competitors'mail, which Royal Mail delivers on their behalf.
The CWU, which fiercely opposed the privatisation over fearsit would lead to poorer job conditions and services, in Julyrejected Royal Mail's offer of an 8.6 percent pay increase overthree years, criticising proposed changes to pensions.
"What we want is a groundbreaking, long-term, legallybinding agreement that not only protects postal workers' jobsecurity, pay and pensions but will also determine the strategy,principles and values of how Royal Mail will operate as aprivate entity," CWU deputy general secretary Dave Ward said ina statement.
Royal Mail noted that, with a 63 percent turnout, 51 percentof all its CWU members had abstained or voted against a strike.It also noted that there were 24,000 frontline employees whowere not union members and therefore did not vote.
Shares in the firm, which on Wednesday named Barclays as its corporate broker, closed down 2.9 percent at 475pence, having been down all day on the expected announcement.
The Direct Marketing Association, representing the UKadvertising mail industry - which it says accounts for 1 billionpounds of Royal Mail's 9 billion pound turnover - said strikeaction would have a severe impact on customers.
"The build-up to Christmas is a critical period thattypically accounts for more than half of businesses' annualrevenues ... Any disruption to service would quickly leadbusinesses to take their custom elsewhere," DMA's executivedirector Chris Combemale said in a statement.
The action comes as many Royal Mail workers have seen thevalue of their free shares in the firm rocket.
As part the stock market listing, 10 percent of shares werehanded to Royal Mail's 150,000 eligible UK-based staff, withfull-time workers each receiving 725 shares, worth around 3,440pounds ($5,500) at Wednesday's closing share price.
That figure was much higher than the 2,200 pounds per personinitially expected, after the shares peaked on Tuesday almost 50percent above the privatisation price.
Royal Mail said on Wednesday that directors of the companyhad applied for a total of more than 500,000 pounds worth ofshares in the float as part of an employee priority offer, andlike others, saw their order scaled back to 10,000 pounds wortheach due to strong demand for the shares.
As well as the shares they bought at the 330 pence offerprice, they also received the free shares as staff. Royal Mailsaid its non-executive directors decided to opt out of receivingthese shares as they deemed it inappropriate.
Chairman Donald Brydon owns 3,030 shares, worth nearly14,400 pounds at Wednesday's closing price, while ChiefExecutive Moya Greene and Chief Financial Officer Matthew Lesterboth have 3,643 shares, now worth more than 17,300 pounds.
The jump in the share price has sparked criticism byopposition lawmakers, who accuse the government of undervaluingRoyal Mail, prompting a parliamentary committee to say it willinvestigate the sale in an inquiry expected next month.
